Apple CEO Cook received stock award worth $US376m

Tim Cook could well end up being the highest paid CEO in America in 2011, after Apple Inc granted him a million restricted stock units last August for taking the reins shortly before co-founder Steve Jobs died.

An Associated Press review of a securities filing shows Cook’s pay package was valued at $US378 million ($A369.88 million). The vast majority came in a grant of a million restricted stock units worth $US376 million at the time. Half of the stock units will vest in August 2016, the other half in August 2021.

His salary and performance bonus, about $US900,000 each, made up much of the rest. He also made $US16,520 from company contributions to a 401(K) retirement account and company-paid life insurance premiums.

In comparison, Jobs accepted a $US1 annual salary for years and owned about 5.5 million shares, worth about $US2.3 billion today.

In total, Cook has about 1.36 million restricted shares that haven’t yet vested and 13,754 regular shares worth a combined $US580 million, the filing showed.

Cook’s award is well above that given to Philippe Dauman, the Viacom Inc chief executive who led the top paid CEOs of 2010 with a $US84.5 million haul based on a new contract that granted him shares and stock options.

Cook’s pay package was also valued at more than all of the next nine highest paid CEOs of 2010 combined, or about $US356 million.

Apple said that its compensation goal is to encourage long-term results above short-term risk-taking, and the 51-year-old former chief operating officer won’t begin to reap the actual benefits of the stock award for another four years.

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But Securities and Exchange Commission rules compel companies to book a share grant’s value in the year it is granted, making Cook’s whopper of a pay package unlikely to be beat.

Cook’s share grant was already known last year. The filing disclosed that the company also decided in November to raise his base annual salary to $US1.4 million and double the bonus target for paid executives to 100 per cent of their annual salary.

Apple said it raised the bonus target to keep its executive pay more in line with that of other technology and entertainment peers like Google Inc or The Walt Disney Co.

The filing was released the same day Apple shares reached a new high in midday trading, briefly hitting $US427.75 before falling back to close at $US421.73.

The AP formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the SEC.

Apple’s new chief executive Tim Cook received a one-time stock award worth nearly $US400 million, the largest given by a company in a decade.

The company’s board granted Cook 1 million restricted stock units (RSUs) to signal its confidence in Cook after Steve Jobs turned over the helm of the iPhone and iPad maker to his long-time lieutenant in August.

The stock award, half of which vests in 2016 and the remaining half in 2021, was worth more than $US376 million, based on the closing price of Apple’s shares on August 24, 2011, the company said in a Monday proxy filing.

“As far as a singular award, we haven’t seen anything this large in a long time," said Aaron Boyd, head of research at Equilar, an executive compensation data firm.

The only one-time stock award in recent memory that was worth more, said Boyd, was the January 2000 stock option package that Apple gave co-founder Steve Jobs. The 40 million options in that award were valued at more than $US600 million at the time, Boyd said.

Jobs, who was ousted from Apple in the mid-1980s, returned to the company in 1997 and went on to transform Apple into the world's most valuable technology company with a string of hit products including the iPod, the iPhone and the iPad.

Jobs, who died in October after a years-long battle with cancer, owned 5.5 million shares of Apple, according to the filing.

Jobs received $US1 a year in salary during the past three years, according to the filing, while Cook received a salary of about $US900,000 in 2011.

Apple said Cook’s award was a retention and promotion tool, as well as recognition for running the company during Jobs’ previous medical leaves of absence.

“The Board views his retention as CEO as critical to the Company’s success and smooth leadership transition. The RSU award is intended as a long-term retention incentive," Apple said in its statement.

Shares of Apple closed Monday’s regular trading session down 67 cents at $US421.73, after reaching an all-time high of $US427.75 earlier in the day.